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The influx of parallel traders who buy their stock tax-free in Hong Kong to resell it in mainland China at a profit is causing growing unrest. Residents of Sheung Shui, a town close to China's border, say the increase in parallel importers has pushed up retail prices and causes a general nuisance. Importers argue that their trade benefits the Hong Kong economy.

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Parallel-goods trading activity remains low in Sheung Shui

Activity remains low at the parallel-goods trading hotspot on the first day after the Lunar New Year, despite predictions otherwise

Predictions that the parallel-goods trading activities in Sheung Shui would pick up again once the Lunar New Year period ended proved false yesterday.

In the vicinity of the Sheung Shui MTR station yesterday afternoon, just a handful of traders were seen packing their goods - including small sachets of milk powder, diapers and candies - to bring to sell on the mainland.

"The number has dropped a lot, as you can see," said an MTR staff member. "Usually, there are more than 10 people lining up to have their luggage weighed. But there is no queue now."

The MTR further tightened its weight limit for each passenger's luggage from 32kg to 23kg.

And on Friday, new government restrictions will come into force, preventing travellers leaving Hong Kong from carrying more than two cans, or 1.8kg, of infant formula out of the city.

Offenders face a maximum of two years in jail and a fine of up to HK$500,000.

Pharmacies near the Sheung Shui MTR station said their stocks of infant formula had regained stability since earlier this month. Local mothers now have no problem securing the milk powder at a reasonable price of about HK$280 per can, they said.

Meanwhile, a survey conducted by the Civic Party this month found 76 per cent of 1,191 respondents feel the government had not done enough to crack down on parallel-goods trading in the city. Almost 70 per cent of those polled believed the government either "needed" or "definitely needed" to abolish the multiple-entry permit scheme for mainlanders.

National People's Congress deputy Michael Tien Puk-sun said he would propose at next month's plenary meeting in Beijing that mainland immigration and customs departments set up a common database.

He said doing so would make it easier for customs officers to establish which travellers had made more than one visit between the city and the mainland in a day.

This would help the officers identify the suspected parallel-goods traders so they can be stopped and searched.

Meanwhile, customs seized 98 cans of powdered formula worth HK$24,940 in two smuggling cases involving private vehicles at the Shenzhen Bay and Lok Ma Chau border control points on Saturday and yesterday respectively, arresting three people. The three were arrested for "exporting unmanifested cargo" under the Import and Export Ordinance.

Customs said it would continue to exercise rigorous enforcement, noting smugglers had shifted to using vehicles to smuggle parallel-traded goods.

This article appeared in the South China Morning Post print edition as All quiet on the sheung shui front